Department for Business, Energy and Industrial Strategy

Update on negotiations with EDF related to the Sizewell C Project

Kwasi Kwarteng: The UK was the first major economy to legislate for a target of Net Zero greenhouse gas emissions by 2050. As set out in the Net Zero Strategy and the Prime Minister’s Ten Point Plan for a Green Industrial Revolution, nuclear will continue to be an important and reliable source of clean electricity as we strive to decarbonise the UK economy. By 2050, we expect that the electricity system will be built on a foundation of renewables such as wind and solar, but these will need to be bolstered by reliable low-carbon power. The UK Government recognises that large-scale nuclear is the only proven technology available to provide continuous, low carbon electricity at scale. Ministers are therefore firmly committed to deploying new nuclear in order to strengthen Britain’s energy security and reduce our exposure to volatile global gas prices, provided there is clear value for money for consumers and taxpayers. In 2016 we took the decision to enter into a Contract for Difference over Hinkley Point C in Somerset, which is currently under construction and expected to begin generating power by 2026, when it will start providing 3.2GW of electricity. However, with 5 of the UK’s 6 nuclear stations scheduled to close by 2028, the Government has made a commitment to bring a further large-scale nuclear project to a Final Investment Decision during this Parliament, subject to value for money and all relevant approvals. To facilitate this, we have introduced legislation for a new financing mechanism, the Regulated Asset Base (RAB) model, through the Nuclear Energy (Financing) Bill. It is estimated that RAB could lower the cost of each new large-scale nuclear power projects by more than £30bn, compared to the existing Contracts for Difference model. The RAB model is also expected to reduce Britain’s reliance on overseas developers for finance by substantially widening the pool of private investors to include British pension funds, insurers and other institutional investors from like-minded countries.After Hinkley Point C, the Sizewell C Project in Suffolk is the most advanced nuclear project in the UK. As a replica of Hinkley Point, Sizewell offers a high level of design maturity and an identified supply chain. The company developing the project has applied for both a Development Consent Order and Nuclear Site Licence and believes it can begin construction during this Parliament. If built, the new plant could deliver around 7 percent of the UK’s current electricity needs (enough to power the equivalent of around 6 million homes) and create tens of thousands of jobs across the country. New nuclear is not only at the heart of our plans to ensure greater energy independence, but to drive economic growth. The Government entered into Sizewell C project discussions in January 2021. Following significant investment from EDF, the project requires additional financial support to further mature it to a point where other private investors (and, subject to value for money considerations and relevant approvals, the Government) could consider a direct investment in the project development company. Sufficient early development funding prior to the construction of major projects is a key determinant of subsequent project performance, and to this end the Prime Minister’s Ten Point Plan committed in 2020 to provide nuclear development funding for this purpose. I am pleased to announce that I will today enter into an option agreement with EDF Energy Holdings Ltd, which provides Government with an option over the land at Sizewell C and conditionally over the shares in the development company in exchange for an option fee of £100m. EDF Energy Holdings Ltd will invest that £100m in further developing the Sizewell C electricity infrastructure project. Should the project reach a successful Final Investment Decision, subject to value for money and all relevant approvals, the Government would recover this funding together with a financing return, either through an equity stake in the project, or in cash. This agreement represents an important milestone for both the Government’s nuclear strategy and the project, which has the potential to significantly contribute to the UK’s decarbonisation and security of supply objectives. However, I am clear that this agreement does not represent a Government decision that the Sizewell C project will progress. Neither is it an indication that similar commercial arrangements would necessarily be desirable for other prospective nuclear projects.Decisions on the Sizewell C Project will be dependent on decisions in respect of planning and designation under the Nuclear Energy (Financing) Bill if passed into law.  Noting that the future of the Sizewell C Project is not confirmed, the agreement the Government has reached with EDF provides the taxpayer with downside protection should the project not proceed. In return for the £100m, the Government will be granted an option on the Sizewell site and conditionally over the shares in certain circumstances of the development company. In the event the negotiations with EDF do not successfully result in a positive investment decision satisfactory to all parties, then subject to certain conditions, taxpayers would be entitled to seek acquisition of either EDF’s shares in the Sizewell C development company or the site itself or if neither can be delivered by EDF, the taxpayer would be entitled to a reimbursement of the £100m with a financing return. This in turn would provide Government with the possibility of proceeding with alternative nuclear or low-carbon infrastructure, and therefore support the realisation of our net zero objectives.Today’s announcement further demonstrates our commitment to energy security, investing in our thriving nuclear sector and creating thousands of jobs.

Foreign, Commonwealth and Development Office

OSCE: Ministerial Council and Priorities for 2022

Chris Heaton-Harris: My noble Friend, the Minister for South and Central Asia, United Nations and the Commonwealth (Lord Ahmad of Wimbledon), has made the following Written Ministerial Statement:The Organisation for Security and Cooperation in Europe (OSCE) faced a challenging year in 2021, with geopolitical tensions leading to a failure to reach consensus on a range of important issues. Sweden, as 2021 Chair-in-Office, steered the organisation through this period with a focus on addressing protracted conflicts, strengthening democracy and enhancing gender equality. The UK worked closely with Sweden, including as chair of the OSCE’s Security Committee, which we have now concluded after two successful years.On 2 and 3 December, Swedish Foreign Minister Ann Linde hosted the 28th Ministerial Council meeting of the OSCE in Stockholm. The Secretary of State for Foreign, Commonwealth and Development Affairs, The Rt Hon Elizabeth Truss MP, represented the United Kingdom. The Ministerial Council is the key decision-making body of the OSCE and was attended by Ministers and senior officials from across its 57 participating States, including US Secretary of State Anthony Blinken and Russian Foreign Minister Sergei Lavrov.The Council agreed a decision on increasing cooperation to address the challenges of climate change. Due to the positions of certain participating States, there was difficulty in reaching agreement on a number of other valuable decisions, reflecting wider difficulties in reaching consensus. In 2021, the OSCE’s Human Dimension Implementation Meeting, Europe’s largest annual human rights and democracy conference, did not take place because we were unable to reach agreement on the agenda.The Foreign Secretary’s intervention at the Ministerial Council underlined the need for all participating States to respect OSCE commitments. The Foreign Secretary raised concern over the impact of ongoing conflicts on regional stability and the threats facing freedom and democracy across the region, placing a particular emphasis on the importance of the OSCE’s work in election observation.The Foreign Secretary’s statement also emphasised our support for Ukraine’s sovereignty and territorial integrity, calling on Russia to use OSCE tools to build trust and live up to their commitments on military transparency. The UK and allies made clear to Russia that its military build-up on the border of Ukraine and in illegally annexed Crimea is unacceptable. We reiterated these points in our closing statement and also regretted Russia’s decision not to renew the mandate of the Border Observation Mission along the Ukraine-Russia state border.During the ministerial working dinner, the Foreign Secretary led a discussion on conflict resolution focusing on the importance of finding the political will to implement existing tools. She also co-hosted a side event on the human rights situation in Belarus, alongside Denmark and Germany, with 36 co-sponsors. Her Majesty’s Ambassador to the OSCE, Neil Bush, represented the UK in a discussion focused on the potential OSCE role in Afghanistan particularly in supporting regional stability.Poland have taken on the OSCE Chair for 2022 and will face another challenging year, at a particularly tense moment for the region. They plan to prioritise conflict prevention and resolution, with a focus on protection of civilians, and will champion building back better through effective multilateralism.At the first OSCE Permanent Council in 2022, the UK offered Polish Foreign Minister Rau our full support. Our statement underlined our support for Ukraine’s sovereignty and territorial integrity in the face of Russia’s aggressive acts and urged participating States to robustly defend the principles and commitments we signed up to. We also emphasised the importance of the cross-dimensional approach to security, which includes support for democracy and human rights, and called for adequate financing of the OSCE’s autonomous institutions and field missions in the Unified Budget. As a consensus-based organisation, where all countries in the Euro-Atlantic Area are represented and have an equal voice, the OSCE has a unique and valuable role in resolving tensions and avoiding escalation.In 2022, the UK remains committed to supporting the work of the OSCE. We will focus on conflict prevention and resolution, ensuring in particular that we use the OSCE platform to hold Russia to account for its ongoing aggression in Ukraine. We will continue to work closely with the OSCE Chair-in-Office, Secretary General Helga Schmid, and other participating States to build an effective organisation which maintains comprehensive security in the Euro-Atlantic and Eurasian area.

Ministry of Defence

Defence Estate Update

Jeremy Quin: The Ministry of Defence (MOD) continues to review its estate to ensure value for money. In 1996, the Ministry of Defence, in what was effectively a sale and leaseback agreement, granted a 999-year lease of over 55,000 Service Family Accommodation homes to Annington Property Ltd and immediately leased the homes back on 200-year underleases. In 2018, the National Audit Office concluded in its review of the arrangements that taxpayers are between £2.2 billion and £4.2 billion worse off as a result of the sale and leaseback arrangements. Given our obligations to secure value for money, we have reviewed MOD’s current arrangements with Annington and now set out the steps that MOD is taking to deliver greater value for money for the taxpayer in relation to Service Family Accommodation. First, MOD engaged highly experienced advisers and counsel to deliver a settlement with Annington in the site rent review process. This settlement achieves value for money, and removes ongoing uncertainty for the Department; we believe it to be a good outcome and a fair settlement. The settlement resulted in a change in the overall adjustment to open market rents from 58% to 49.6%. Secondly, MOD continues to reduce the number of untenanted properties which it holds since these otherwise represent a liability for the taxpayer, by returning these to Annington under the terms of the lease. Thirdly, MOD can confirm that the Department will explore the exercise of its statutory leasehold enfranchisement rights to buy out Annington’s interest in the homes and gain full ownership rights. Initially, the MOD has made a single claim for one house, with the intention to submit a further claim in respect of another house in the near future. It is hoped that this test case will establish certain key principles. The cost of enfranchising these houses will be in accordance with the statutory enfranchisement formula, fixed at the date of the notice of claim, and the price will be agreed between the parties or determined by an independent Tribunal. If the cost of recovering full ownership of the units from Annington is less than the present value of MOD’s ongoing liabilities, such a transaction is likely to represent good value for money. The MOD would then benefit from any future appreciation in value of the units. Accordingly, the MOD has served notice on Annington under Section 5 of the Leasehold Reform Act 1967 of its desire to enfranchise a house currently leased from Annington. Annington, through its lawyers, has notified the MOD that it is considering the impact of the claim and has put the MOD on notice of a potential dispute. A successful enfranchisement programme would also provide the MOD with more flexibility in the management of its estate to the benefit of Defence, tenants, and potentially wider Government objectives.

Department of Health and Social Care

Covid-19 Update

Sajid Javid: Thanks to the success of the vaccination booster roll out, and the reducing level of both infection and hospitalisations across the country, the government has been able to announce the end of Plan B. This means we are now able to take steps towards getting care homes back to normal, easing some of the difficult restrictions which both staff and residents have had in place which I know have been incredibly challenging for all, whilst still protecting residents from the continued risk of COVID-19.From Monday 31st January, there will no longer be nationally-set direct restrictions on visiting in care homes and there will be no limit on the number of visitors a resident can receive. Residents should be supported to undertake visits out of the care home without the need to isolate on their return, but should continue to take reasonable precautions and undertake testing arrangements for high-risk visits.As well as removing those additional precautions we put in place in response to the Omicron variant, we are now able to reduce isolation periods for residents in care homes so that they are the same as for the general public in most cases.Residents who need to isolate will now only need to do so for a maximum of 10 days. The 10-day maximum period will apply to those residents who test positive, are identified as a close contact or have had an unplanned stay in hospital. For some residents, the isolation period could be as short as five days subject to the testing regime that will be outlined in guidance.Today I am also announcing changes to regular testing for staff. For all adult social care staff, we are moving to lateral flow testing every day before work and removing weekly PCR testing. Recent clinical advice is that following the pre-shift testing regime provides better protection than the current regular testing regime of weekly PCR with three lateral flow tests a week in high-risk settings.As restrictions are relaxed for care home residents and for the general population, testing continues to be essential for providing the protections needed to support this relaxation of restrictions. The introduction of pre-shift rapid lateral flow tests should help identify and isolate positive cases quicker rather than waiting for PCR results to return from the lab.This change applies only to regular asymptomatic testing for staff meaning PCR tests will remain available for symptomatic staff and residents. Outbreak testing and monthly resident testing will also remain unchanged.By maintaining a robust regime of testing in adult social care, continuing to press ahead with our vaccination programme and maintaining high standards or infection prevention and control, we are able to support residents of care homes and recipients of care to gradually return to enjoying life as it was before the pandemic.

The NHS Constitution and Handbook

Edward Argar: Statutory report on the effect of the NHS Constitution and updates to the Constitution HandbookIn accordance with the Health Act 2009, I have laid before Parliament a report on the effect of the NHS Constitution. The report has also been published on the Gov.uk website, alongside an updated version of the Handbook to the NHS Constitution.The NHS Constitution, like the NHS, belongs to us all. It empowers patients, public and staff by bringing together in one document the founding principles and values of our NHS. It sets out the legal rights to which patients, the public and staff are entitled and the pledges that the NHS has additionally made towards them. Just as importantly, it makes clear the responsibilities which we all have for supporting the NHS to operate fairly and effectively.Throughout this extraordinary time where we have seen the huge impact of the pandemic on staff, patients and society as a whole, our NHS workforce have strived tirelessly to protect the people we love. It is therefore more important than ever that patients, public and staff know their rights, responsibilities and what they can expect from their NHS.The report is based on an independent survey of staff, patients and the public. It describes how they view the impact of the NHS Constitution, and its value in promoting and raising standards of care.While the report shows that public awareness of the Constitution is still low, we are pleased to see it has increased since the 2018 report, and staff awareness remains significantly higher than public awareness. We know that those informed about the NHS Constitution are more likely to use it and so there is further work to do in improving awareness to ensure we all get the most out of our interactions with the NHS.Looking forward, a full review of the NHS Constitution itself is due in January 2025. The scoping for this review, including a statutory consultation with patients, carers and staff will begin this year. We will use the findings from today’s report to shape the consultation and explore how to increase awareness and use of the NHS Constitution across all public and staff groups.Alongside this report we have also published a revised version of the Handbook to the Constitution. The Handbook explains each right, pledge and responsibility in the NHS Constitution. It is designed to give the public, patients, their carers and families, and NHS staff fuller information about what the Constitution means for them. This revision ensures the information given in the Handbook remains accurate and up to date.

Department for International Trade

Trade Policy Update

Anne-Marie Trevelyan: The United Kingdom has today launched negotiations with the government of Greenland on a continuity free trade agreement to reduce the costs of trading and to identify areas of strategic interest for future cooperation. While we introduced temporary measures to secure some continuity of trade with Greenland at the beginning of 2021, we never closed the door to securing a more permanent arrangement at an appropriate time.These negotiations will seek to ensure that British firms can once again import popular products from Greenland tariff free. This will also support processing industries in Scotland, the North East and North West of England. As Greenland is the largest supplier of cold-water prawns in the world, as well as being a leading source of fish, these negotiations will help ensure the stability and resilience of British supply chains for consumers and the hospitality sector. The negotiations will also lay the groundwork for potentially tackling market access barriers for British businesses in Greenland in the longer term, including by liberalising professional business services trade, facilitating inward investment, and agreeing mutual recognition and double taxation arrangements. These discussions will therefore pave the way to potentially to unlocking significant new opportunities for British exporters and investors looking to extend their presence across the Arctic.Additionally, Greenland is an important partner in the Arctic – an increasingly important geo-political area. These negotiations provide an opportunity to establish a dialogue through which to broaden our cooperation with Greenland on our priorities, such as climate change, science and research, and potentially the supply of critical minerals.As the Arctic continues to grow in strategic importance, Greenland will be a key partner in ensuring a secure, stable, and sustainable future for the region.In parallel, we expect the Department for Environment, Food and Rural Affairs to enter into negotiations with Greenland on our access to Greenlandic fishing waters.This agreement will constitute Greenland’s first bilateral agreement with a third partner country, and we look forward to using this opportunity to solidify and strengthen our trading relationship in the future.We will ensure Parliament is regularly updated on the progress of these negotiations.